Merrill Lynch does its best to depict the glass half full. One of their black marks against Venezuela is that public sector employment increased by 50% to a whopping 15% of total employment.
Let's compare that to Norway, which many regard as the best when it comes to managing an oil economy. Well, guess what? 31-37% of Norway's workforce is employed by the public sector, depending on whether you include publicly owned companies or not.
In addition, Norway's government spending represents half of GDP while Venezuela's is closer to 33%. Yet Venezuela gets criticized for increasing its public spending.
Anyone sense a double standard here?
Actually, John they didn't say that public sector employment increased by 50%, and it didn't. They say almost half of all new jobs were public sector jobs. But that is really a sleight of hand on their part. The reason is that net private jobs only went up by 537,000 because the informal sector (all private) decreased by 254,000. That is actually a good thing. If you compare how many formal sector jobs were created then 791,000 were private and 466,000 were public so the private sector created a LOT more jobs than the public sector.
Actually, who ever wrote this must be hanging around with the opposition too much. They spin the numbers just like the opposition does, drawing clearly false conclusions, and hoping that no-one takes the time to read the actual numbers, which paint a different conclusion.
Just for the record: apart from the job creation, the report is with reason critical of exchange controls, inflation and artificially low interest rates. 
JohnH: You should compare things that are comparable. Norway's government may spend half of the country's GDP. Contrary to Vzla, but they do *not* run budgetary deficits; the government quality and services offered are also hardly comparable to these in Venezuela. Moreover, Norway has sound macroeconomic policies. They don't spend their oil revenues recklessly - actually they set up a fund where substantial parts of total revenue gets stored so that also further generations may profit from present wealth.
"Contrary to Vzla, but they do *not* run budgetary deficits"
Venezuela doesn't run budget deficits either - outside of opposition propoganda. 
They've been paying down their debt for the past couple of years.
"Moreover, Norway has sound macroeconomic policies. They don't spend their oil revenues recklessly "
Allocating more than $17 billion for infrastructure projects can hardly be qualified as 'reckless'. Unless you are interested in doomsaying and scaremongering, something that the international financial community is very good at. Witness their mainly silent demeanor about the impending mortgage market crisis in the USA.
But Venezuela, according to them, is doing everything wrong.
Sire--
1) "the government quality and services offered are also hardly comparable to these in Venezuela." Yes, Norway's government services are better--they produce the same amount of oil and spread the wealth over 4.6 million people instead of 26 million.
2) "Norway has sound macroeconomic policies" Yet their public debt is 60% higher than V'zla's (relative to GDP).
3) "They have a Petroleum Fund for future generations." Interestingly, they started saving only in 1996, when declining production was only a few years away. Venezuela is nowhere near a decline, due to Orinoco reserves. Second, they have so few people that they can easily afford massive social programs and savings at the same time.
ow,
http://www.eluniversal.com/2007/
...va_214581.shtml
John:
1) Norway does not spend all of its oil revenue. According to your logic then, a bigger country would have to be necessarily poorer, which is not necessarily the case.
2) Yes, their debt/GDP ratio is higher, but they have not been running budget deficits recently. Sound macroeconomic policies don't just include the debt/GDP ratio, but also inflation, for example.
3) Let's see what the offshore exploration in Northern Norway reveals. And Sweden and Finland have similar social programmes, yet no oil. It's accordingly not just size and oil wealth that makes it possible or impossible.
Sire--
Since Sweden and Finland also have similar social programs, can we agree that there is nothing inherently wrong with high levels of public spending for infrastructure and social programs? The issue is sustainability of revenues, which Norway and Venezuela both face. (Note: the ECB considers a deficit a concern only when it exceeds 3% of GDP)
Also, Venezuela does not spend all of its oil revenues. A lot have been invested and held as foreign reserves.
Now that Norway has found more natural gas, it will be interesting to see if they continue to grow their Petroleum Fund...
The real issue here is that, whatever Norway does, it is considered just fine, but when Vzla pursues similar policies, they get criticized.
Numerous countries that have followed the structural adjustment plans of the IMF have experienced an explosion of employment, if that's what it can be called, in the informal sector at the expense of the loss of jobs in the formal and government ones.
One wonders, has Merrill Lynch ever reported negatively on such results? It seems doubtful.
Nothing inherently wrong about them. If that's what the people want, so be it.
Yes, there is a 3% limit set by the ECB. However, if you have budget deficits even when oil prices are at historical peaks, this is worrisome. In times of bonanza, the gov budget should at the very least be in equilibrium. By contrast, Norway has had no budget deficits (all the contrary) for quite some time. Note: for 2007, the deficit is forecast to -3.8% of GDP.
Not all, but most of it. See that the reserves oscillate around $30 billion and do not increase, despite high current account surpluses.
The fact is that the do not follow similar policies. Norway has no double digit inflation. They have not increased public spending annually by ~60%. They do not run budget deficits in bonanza times. Their liquidity is not skyrocketing. They have an independent central bank. They have no exchange controls and no overvalued currency. Private investment is higher, and so on...
According to the Feb. 3rd issue of the Economist Venezuela is running a budget balance of minus 2.5%. Meanwhile Norway is running a plus 19.3%.
See page 98.
Venezuela has been running budget surpluses, not deficits. Sire the problem with that article is they only account for part of the budget, not all of it. The budget starts out with certain assumptions in the beginnign of the year but changes as conditions change - revenues can go up or down and expenditures can go up (not too often down). So to get the true picture you have to see the final numbers, after teh year ends, and counting all expenditures and all revenues. WHen doing that, Venezuela has run surpluses recently, not deficits.
John from Panama,
THe Economist would have the same problem. Are they talking about the current year when they say "running"? If so, they obviuosly can't possibly know if Venezuela will have a surplus or deficit this year, no one does. It depends on oil prices, tax collections, spending, etc. We probably won't even have a good estimate until October or November.
Sire,
I'm not sure why you are comparing Norway and Venezuela, I don't think they are comparable. Norway was developed even before it produced oil, Venezuela wasn't. And Norway has much higher per capita oil revenues than Venezuela. So you can't expect Venezuela to do as well. Venezuela indeed isn't as prosperous as Norway but that certainly isn't Chavez's fault. What Chavez can do is make Venezuela more prosperous than it was when he took it over, and he has been doing that, but he can't make it catch up with countries that were so far ahead to begin with.
Venezuela's reserves are not flat. Remember you have to count Fonden which keeps getting "excess" reserves. If you coun't Fonden Venezuelan reserves are about $45 to $50 billion, way up from $15 billion at the end of the oil strike. And the number has been steadily increasing.
However, Venezuela would not want to set up a huge rainy day fund like Norway. Venezuela has huge unmet needs - lots of poverty, defficient education, deficient infrastructure, etc. These things really need to be addressed now. Norway, for the reasons mentioned above doesn't have them. So they can save more. Rich people who have high income can always save more than poor people who need to consume pretty much everything they receive. It goes for countries as well as people.
THe housing sector appears to be doing well and even creating some materials shortages with its own little boom
http://www.unionradio.com.ve/
Not...oticiaId=198027
ow, surely no one knows for sure for 2007, but the estimate is a minus. Regarding 2006, "Las cifras del Banco Central de Venezuela precisan que el ańo pasado el ingreso ordinario, que no incluye lo que reportan las operaciones de financiamiento, ascendió a 111,6 billones de bolívares, mientras que el gasto ordinario, es decir, sin tomar en cuenta la amortización de deuda, se ubica en 113,9 billones, con lo que el resultado es un déficit de 2,28 billones de bolívares." Isn't that a deficit?
I don't think they are comparable either, which I stated above. However, John told us they followed the same policies, thus my references.
Yes there is FONDEN, but very little specific facts about it are known, more transparency is needed. And FONDEN spends money (although wen don't really know how much), it's not kept aside AFAIK.
Granted, there is infrastructure needed, etc. So why then donate billions abroad, increase arms spending, etc. instead of putting something aside and/or get rid of external debt? Additionally, when investment is so much needed, why then generate unnecessary legal, institutional, etc. uncertainty which shuns private investment?
John from Panama: the latest issue of the mentioned magazine has it at -3.8% of GDP.
Presented with fact after fact, Sire is backing up and arguing more and more trivial issues. Which does show that he's clearly fairly rational for an oppositionist. On his latest points--
I suspect Norway also has an armed forces, despite the fact that they don't have a border with a country in what amounts to a civil war in which one side is armed by a power hostile to them. Could we get real? Of course Venezuela needs military spending.
I don't know if they're actually "donating billions abroad". Some of what often gets counted as "donating" is things like buying Argentine bonds, which isn't really a donation, it's buying a government bond. Probably less risky than the billions in US bonds China buys. But I do notice that the practices coming roughly under this heading have done two important things. One, they've made many people's lives better. Two, they have been highly effective in foreign policy terms, fostering closer relations with various countries and helping secure greatly increased regional trade. During Bush's recent tour through Latin America, even right wing leaders seemed very reluctant to take a hard line against Chavez. Chavez has, in effect, bought regional influence with that money in much the way the US used to do (except the US' aid has tended to be if anything destructive rather than constructive), and like the US is likely to benefit from it. Already has in the sense that the US would dearly love to isolate Venezuela and has been having no luck at all.
Actually Sire, estimates I've seen are a surplus. Take this presentation from VenAmCham that I posted a little while back:
http://i6.photobucket.com/
albums...redictions2.jpg
And again, the article you reference they only include "ordinario" numbers which are incomplete. The "ordinary" numbers are probably based on oil at $29 per barrel that the budget is based on.
"Yes there is FONDEN, but very little specific facts about it are known, more transparency is needed. And FONDEN spends money (although wen don't really know how much), it's not kept aside AFAIK. "
Plenty of information has been published on FONDEN, even in El Universal . The current balance is around $10 billion if memory serves.
Purple Library Guy
Excellent summary of Chavez continental success.
"So why then donate billions abroad, increase arms spending, etc. instead of putting something aside and/or get rid of external debt?"
He hasn't donated billions abroad. If you have information to the contrary please provide it. He has paid down the debt. Look a few weeks back in this blog and you can find graphs on that.
"Note: for 2007, the deficit is forecast to -3.8% of GDP. "
If the reserves goes up, and the public debt goes down YOU ARE NOT RUNNING BUDGET DEFICITS!!!!
Venezuela does not print dollars for crying out loud.
Opo economics sux balls.
PLG:
Yes, every State can have its military. But Venezuela spent more on armament than Pakistan or Iran (and Norway!) and is the State in Iberoamérica that spent most on armament, although its population is by far not the largest. And if infrastructure and reducing poverty and what not is as urgent, I fail to see how US$ 4.300 millions of arms purchases in two years are justified.
US bonds are a lot less risky than Argentina's bonds, not vice versa as you consider. That the nation overall loses with the Bono del Sur is also well known. Furthermore, I fail to see right priorities when donating oil to the world's richest cities and countries when there are needs as pressing as there are at home. If you really want to increase trade, go for a pan-American FTA. Finally, is buying friends and influence with money really a desirable thing (after all, doing so is imitating, according to you, the evil empire)? In what terms did it benefit the country? After all, they failed to get a non-permanent Security Council seat, Brazil and Uruguay happily received the US and most SA States are still waiting to sign an FTA with the US. There have also been quite a number of diplomatic fallouts, as you might recall. Again, with such pressing needs as you all cite, the money could have been spent a lot wiser.
ow, so what's or where's the final 2006 balance? After all, we're well into 2007, so we should be able to find it somewhere?
Regarding FONDEN, it's not as transparent as you would like us to see it:
http://buscador.eluniversal.com/
...rt_173054.shtml
http://noticias.eluniversal.com/
...rt_166606.shtml
And, yes, debt has gone down, but is still higher than in 1992-98, where the oil prices was relatively low.
Surely, there have been donated substantial amounts of money abroad, eg in the US, in the UK, the $100 million assistance fund for Bolivia, and plenty more.
No Flanker, your economics "sux":
- you can very well run CA deficits and budget deficits at the same time.
- you can also run budget deficits and have total debt declining.
"ow, so what's or where's the final 2006 balance? After all, we're well into 2007, so we should be able to find it somewhere? "
You'll find that information here:
http://www.mf.gov.ve/
Also the National Assembly web page has a lot of it.
On the Argentinian bonds, sure they are riskier. THey also have higher rates of returns. The point is they are investments not donations. Venezuela has made lots of money on them so rather than a donation they are a very profitable investment.
"And, yes, debt has gone down, but is still higher than in 1992-98, where the oil prices was relatively low. "
Not relative to the size of the economy, which is what counts. It is now about 25% of GDP which is lower than before (the US debt is about 70% of GDP by way of comparison) Also, after dealing with the 99 recession Chavez had it going down until the opposition coup and strike. Now it is going back down again. Hopefully that will continue as long as the opposition behaves itself
- I see, it's a meager 0.1% of GDP surplus.
- they may have higher returns than US treasury bonds, but how about the money the BCV loses in the process??
- Regarding the GDP deficit percentage: look, between 1992 and 1998 it went down over 20% with quite low oil prices, whereas now you're just getting lower than the level prevailing at the end of the nineties (and still, at the same time internal debt has risen, if I remember correctly)
Just as a comparison, Angola, also benefiting from oil revenues, has reduced external debt from 82% of GDP to 34% of GDP between 2002 and 2006. Trinidad and Tobago reduced theirs by 50% between 2001 and 2006..
Sire,
The articles you linked to on FONDEN are non-sense. FONDEN is administered by the Ministry of Finance and its year end annual report is here:
http://
www.asambleanacional.gov....006finanzas.pdf
FONDEN starts on page 171.
The actual projects are administered by the relevant Ministeries. Their respective Memoria y Cuenta reports for 2006 detailing everything are here:
http://
www.asambleanacional.gov....emorias2007.asp
Lots of light bed time reading The Venezuelan government is extremely transparent (way more transparent than any previous Venezuelan government or much of any government that I know of for that matter) so one can spend a lifetime reading all this stuff
So the ex-president of the BCV is a complete lunatic knowing nothing? Come on...
ok here we go. From the same Finance Ministry year end report linked to up above here goes year end 2006 final numbers:
Revenues were: Bs. 130,589,063 million
Expenses were Bs. 128,261,073 million
That is a surplus and from what I can see that INCLUDES debt paydwon on the expense side. Though I would have to read more to be sure of that.
Anways, it took me about a half hour to look this stuff up. I'm not a reporter and I don't get paid to do any of this - in fact I have full time other employment. Yet I can look this up. Makes you wonder what the deal is with all the opposition media who like to pretend everything is a mystery when in fact it is all clear as day.
"So the ex-president of the BCV is a complete lunatic knowing nothing? Come on..."
Or maybe a person with an axe to grind who therefore decides to lie about things? Kind of like all the ex-PDVSA execs and other oppositon supporters.
After all the info he claimed in that article didn't exist is right there in a report on the internet on page 171. I can read it, I trust you can read it, so why didn't he read it?
As cited above: it's a meager 0.1% of GDP surplus.
I will have a look a the report. However, surely they are incompetent in generating pdf. the doc size is outrageous, especially for a country with not so fast Inet as Vzla...
BTW, just for fun Sire I looked up the defense spending. From the Ministry of Finance report we know that the Ministry of Defense got $1,093,000,000 from FONDEN. Then I downloaded the Ministry of Defense 2006 year end Memoria y Cuenta report (it downloads as a zip file from the AN page I linked to up above) and looked up how much they spent out of their budget. That was 1,977,179,179 Bolivares which is what, maybe $800 hundred million dollars. So that means all told Venezuela spent $1.9 billion on its military last year. So I guess your $4.3 billion number is a little off
"As cited above: it's a meager 0.1% of GDP surplus. "
Not if the numbers include debt repayment which at first glance they seem to.
"I will have a look a the report. However, surely they are incompetent in generating pdf. the doc size is outrageous, especially for a country with not so fast Inet as Vzla..."
This is a little petty don't you think? The point is they are VERY transparent.
It's for two years, as mentioned above.
Didn't notice that. Then that is probably right - though it is total military expenditures not just "purchases". And isn't it nice you can go right on the internet and look it all up in transparent accounts. If you want to see how much of that was spent on uniforms or how much was spent on salaries in the military academy it is all right there.
The $2 billion per year on defense is somewhere around 1.5% of GDP per year. That is not at all unreasonable and quite low compared to lots of countries. Venezuela does have potential threats so surely they are not going to not have a defense.
Nah: "NUEVA YORK, Estados Unidos, feb. 25, 2007.- El gasto en armas de Venezuela se incrementó en más de cuatro mil millones de dólares en los últimos dos ańos, para ubicarse como la principal nación latinoamericana compradora de armamento, informo hoy el diario The New York Times.
Venezuela se ha colocado incluso delante de grandes compradores internacionales de armas como Pakistán e Irán, preciso el rotativo."
odd....the ML reports notes that poor job creation is a problem and goes on to say that without the surge in the public sector, unemployment would be 17.8%. Yet you seem to ignore this in your analysis.
The more interesting parts of the report (at least the part you posted) are also ignored. Reading it gives me lots of reasons to worry about sustainability of growth, inflation and vulnerability to oil shocks (the conditions that allow loose fiscal policy)...not to mention the investment environment for private business.
Also you focus on a number 791,000. It is much more instructive to focus on rates i.e. increase of X% in private sector jobs. Comparing to 2003 is also not to useful. 2003 was a year of wrenching pain for Venezuela. The recession eliminated many jobs. Given a rebound from the recession (capacity is put back and workers hired) and higher oil prices ANY government would have created lots of private sector jobs between 2003 - 2006. The question is whether 791,000 is a good number. Is it better than what could have been achieved with different policies? ML does not think its great. And given how they describe the conditions for private investment in Venezuela......its seems investment (and jobs growth) could be a lot higher - and remember they are describing a country that is and has been booming....
Sire..it is good to see you read the Economist too. Did you notice the forecast on Chile is a 4.3 surplus?
OK I had a look at the report. There is *indeed* a breakdown of the money FONDEN received (!).
However, the corresponding project information at the AN is not so good and complete (check the MIBAM for example). Still, given that it's stated that: "así como cualquier otro proyecto que sea necesario financiar a
juicio del Directorio Ejecutivo, previa aprobación del Presidente de la República", FONDEN represents some sort of parallel budget with large discretion of just one or two persons presiding over the money.
Not all of the reproaches are thus fully unjustified. Even the pro-government Últimas Noticias confirmed this: http://contextos.blogia.com/2007...corrupcion-
.php
Yes, John from Panama. Chile has done very well economically for the last two decades or so.
"Nah: "NUEVA YORK, Estados Unidos, feb. 25, 2007.- El gasto en armas de Venezuela se incrementó en más de cuatro mil millones de dólares en los últimos dos ańos, para ubicarse como la principal nación latinoamericana compradora de armamento, informo hoy el diario The New York Times.
Venezuela se ha colocado incluso delante de grandes compradores internacionales de armas como Pakistán e Irán, preciso el rotativo.""
I guess that's gonna happen every once in a while with every country that tries to renovate their obsolete weaponry. So, $4 billion in two years: that makes, what? $2 billion a year?
I guess that makes Venezuela a "big international buyer".
Compare to Venezuela's greatest enemy in the region: $500 billion + of YEARLY military budget.
Did somebody say something about the pot and the kettle?
Notice that Venezuela still spends much less than Chile, Colombia and of course, Brazil (with a whopping $13 billion a year of military budget), in absolute terms and also relative to the GDP of each country.
That NY Times article is one of the most egregious examples of yellow journalism I read in the last few weeks...and the disloyal Venezuelan opposition parrots it.
Sire your notion that Venezuela spends more on teh military than other L.A. countries is WAY off:
http://www.globalsecurity.org/mi...ld/
spending.htm
Brazil is $9.9 billion
Mexico is $6.1 billion
Chile is 3.9 billion
Colombia $3.5 billion
Argentina $1.8 billion
Venezuela $1.6 billion
These numbers are for 2005 which would be the first year of that "two year period". So you can see that unlinked and un attributed (cause it doesn't even have a date) assertion is completely false.
BTW. Iran and Pakistan are both listed as $4.3 billion which makes sense with regard to your quote but that is for ONE year.
So those assertions aren't even close to being corect.
"Yes, John from Panama. Chile has done very well economically for the last two decades or so."
Do you think Chile where this started with killing off trade union leaders, banning the unions, and suppressing dissent is a model you would like to see Venezeula follow?
Sire, the article you linked to straight out lies. FONDEN does indeed have its accounts published, I just linked to them. How can you be so gullible after being shown the very things that article claims doesn't exist?
Also the FONDEN report does show what the money is spent on and breaks it down by Ministry. For more details you go to the Ministries individual reports which are on the same web-site.
Sire, what conclusion do you draw from opposition newspapers and opposition supporters saying this information is not made public when I just showed it to you on a government web-site? I think you should start to draw conclusions. That is what I did about 4 years ago.
"odd....the ML reports notes that poor job creation is a problem and goes on to say that without the surge in the public sector, unemployment would be 17.8%. Yet you seem to ignore this in your analysis. "
Tor please explain how they did that analysis. For example, please explain how without the creating of the 400k public sector jobs unemployment would be 17.8%? You'll note, they are trying desperately to draw bad conclusions from some pretty good numbers but wind up just handwaving.
Yes Tor, 2003 was a recession. I think the economy declined about 9%. That means that during 2003 jobs would have been lost which further means that from 2004 to 2006 even MORE than 790,000 jobs would have had to been created to arrive at the 790,000 number for the entire four year period.
Now you ask if 790,000 is a good number for Venezuela. Well just look at how many formal private sector jobs existed before 2003 - it was 3,330,000. That is in all of Venezuelan history up to 2003 that was how many private sector jobs were created! Or even be nicer and make the simplying assumption that they were all created over the past 30 years - that will give you 100,000 new jobs per year on average. In the past few years the government has been creating at least 250,000 such jobs per year!!!!!
QUite clearly, this is excellent job creating by Venezuelan standards. And if you were to compare it to job creation rates in, for example, the U.S. which has the reputation of being a job creating machine it does quite well.
Guys - This thread is great as it illustrates oppo manipulation vs. OW and others finding out the facts.
It's an on line example of how the media manipulates and lies about Venezuela day in day out.
Sire's argument that you can't spend on, for example arms or infrastructure when houses need to be built is fatuous in the extreme.
Using this logic, everything should stop unti the housing problem is resolved, then life can continue again. The government is elected to decide on these priorities and you can whine all you want since that's all you've got left, Sire.
The NYT Times article is just lies as well and part of the on going campaign in the uS. Much like the statement of the Colombians in NY. It's just the rancid oligarchy of Colombia - much worse than here - since many are in league with the paras and hit men. When you play with fire...
Rubén
Merrill Lynch? I prefer to believe the opinions of a bag of shit rather than those capitalist, work shy exploiters and representatives of the corporate greed of Gordon Gecko!
Rubén
Merril Lynch screwed up. They published the actual numbers so you could see what they wrote was non-sense and that the actual jobs numbers were great.
Bet they won't do that again
""No Flanker, your economics "sux":
- you can very well run CA deficits and budget deficits at the same time.
- you can also run budget deficits and have total debt declining."
BS a simple glance at thermodynamics throws the entire opo theory off.
Venezuela gets Revenues, it has expenses, if expenses are more than revenues it HAS TO BORROW MONEY. The govt uses the reserves as a quasi bank so we factor that in. SO in the net effect it is a simple accounting calculation. If savings increase and you do not enter into debt YOU ARE NOT IN THE RED EVER!!
Progress in education?
It is a FARCE!
http://www.eluniversal.com/2007/
...re_220748.shtml
I reckon some chavistas are going to say those who
state such things as discussed in that article
are traitors, payed by the CIA.
Man...how sad that such people can be in
the government.
I hope one day my country will go to the path
of sustainable development.
ow,
- these assertions are correct, you just need to read attentively: they do not refer to global military budget, but to arms purchases, to armament.
- Regarding Chile, I referred to the "last two decades or so", which excludes the Pinochet period. Maybe it would be more correct to refer to 1.5 decades. No need to insinuate too much
- Regarding FONDEN: Again, please read what I wrote above: I stated that I had indeed seen the financial statement published, much to my surprise. I would not call Últimas Noticias an opposition newspaper though. Apart, my other objections to FONDEN still stand.
Flanker, how about trying economics instead of thermodynamics?
a) - you can very well run CA deficits and budget deficits at the same time: this one is clear. See USA.
- you can very well run CA surpluses and budget deficits at the same time: this one is possible as well. See China, for example.
b) - you can also run budget deficits and have total debt declining."
This can happen for example if your currency is appreciating towards the one you have your liabilities in. It's also possible to have this if the budget without debt repayment is positive, but including debt repayment negative.
You're mixing up international reserves (for external balance) and government budget (internal balance).
Rubén: I doubt that the government was elected based on arguing to spend $4 billion on arms. It promised to solve the housing problem and what not. Therefore, yes, I would have expected them to have other spending priorities.
"- these assertions are correct, you just need to read attentively: they do not refer to global military budget, but to arms purchases, to armament. "
Sire, then your assertion is incorrect in another way. If it only refers to arms purchases then the 4.3 billion number for Venezuela wouldn't be correct. That number includes salaries, supplies, maintenance, etc. - in other words everything. You can look it up on the same web site - just look up the Defense Ministry report.
I'm not clear what your remaining problem with Fonden is.
"Rubén: I doubt that the government was elected based on arguing to spend $4 billion on arms. It promised to solve the housing problem and what not. Therefore, yes, I would have expected them to have other spending priorities."
Sire, Chavez was just re-elected in December, AFTER all the alledged military purchases. So clearly the Venezuelan electorate is ok with it.
BTW, they spend far more on social welfare programs and infrastructurethan the military. SOunds good to me.
Kepler--
How wonderful that you live under a system of government where corruption can be exposed in the NA!! Such a thing would never have been uncovered in the United States unless the opposition party took over Congress.
ow,
Make the calculus. 24 fighter jets for every one about US$40mio. 100.000 AK-47 for every one about $200. You already get arguably close to 3 billion for this. And that does not include the boats and what not. The US$ ~4 billion sounds thus correct to me.
Cited from above: "FONDEN represents some sort of parallel budget with large discretion of just one or two persons presiding over the money. "
Re-election does not have to mean endorsement of all policies. I dare say that he was re-elected *despite* the oil given away and the money invested in armament. Your argument is simplistic: according to your logic, he was reelection also endorsed his failure to combat crime, which is not the case as seen in surveys listing crime as one of the more pressing issues.
"Make the calculus. 24 fighter jets for every one about US$40mio. 100.000 AK-47 for every one about $200."
When I do the calculation I don't even get $1 billion. And when you look at the accounts on the internet TOTAL military spending including the FONDEN contribution comes to only $1.9 billion for last year. So you are off on this.
""FONDEN represents some sort of parallel budget with large discretion of just one or two persons presiding over the money""
Its a legal budget overseen by the Ministry of Finance and reported to the AN. Sounds fine to me. If you read the report the first thing they went over was the legal basis for it and the control systems.
"Re-election does not have to mean endorsement of all policies. I dare say that he was re-elected *despite* the oil given away and the money invested in armament."
On this I agree with you. He is popular enough from other policies that some deficincies are made up for.
For the record and as I have stated here before I wish Venezuela didn't have to spend a penny on the military. But obviously they feel they do. It is by international standards a small amount so I doubt many Venezuelans are upset about it the way they are about, say, crime.
What numbers do you use then? Don't just say what FONDEN spent, but calculate what these things *actually* cost...
I did not say it was illegal, but that there was too large discretion. If something is legal, it is not necessarily a good thing, neither the most desirable. I am also unsure what amount of the funds spent was actually converted to Bs., thus adding liquidity.
I guess they are indifferent. I doubt they actually would encourage the government to do so, though.
Sire, I was referring to your numbers. Do the calculations for your numbers and they come to less than $1 billion not the $3 billion you said.
Hmmmmmm...There's a glitch indeed I will have to re-calculate, my bad..
ow, the deals with Russia are worth more than $US 3 billion. So the cited number may not be so wrong..
http://www.mosnews.com/news/
2006...ufighters.shtml
http://news.bbc.co.uk/2/hi/europ...ope/
5221468.stm
A) the Russians are probably going to overstate those numbers if anything B) not all "deals" actaully wind up happening - in fact most probably don't and C) this isn't done in one year.
For example, the fighters are probably taken posession of over a number of years and are paid for as they get them. So instead of being almost a billion in any one year it may be $200 million or so over five years.
Again, last years military spending totalled $1,9 billion. So they clearly didn't pay $3 or $4 billion last year.
One day when I read the whole Ministry of Defense financial report maybe well get the exact numbers for this. Right now I'm concentrating on the Ministry of Finance report ant that is 671 pages!!!!!
The Venezuelan government is a little TOO transparent if you ask me!
I see no reason for overstating them. For public international opinion it would be more rational for them to understate them. Let's thus assume it's more or less correct.
This deal alone is about three billions. You can always add mitigating factors as payment after receipt and what not, but what the statistic refers to is probably just the arms purchases committed to during the last two years, which seems quite a reasonable approach, as long as you use the same methodology for all the countries surveyed, which also seems to be the case.
And a little more transparency for the new Constitution would also have com in handy
"as long as you use the same methodology for all the countries surveyed, which also seems to be the case. "
Huh, other countries spend way more than Venezuela. In fact, the only way Venezuela could be spending more to purchase arms than countries like Iran and Pakistan as your article states is if those countries spent virtually all their defense budget on things OTHER than buying arms while Venezuela spent virtually its entire defense budget on buying arms. This is almost certainly not the case. And if you read though the Ministry of Defense report it is clearly not the case.
Again, these are spent over years. Just like when the US announces the F22 fighter will cost $100 billion they don't mean in one year - they mean spread over the 15 years or so it will be produced.
What more transparency do you want? It appears there is complete 100% transparency. Have you read the reports and found something missing?
ow,
you've the patience of job. good work.
The article is about arms purchases committed to during the last two years, regardless of when they are delivered, paid, etc. And for this, the number seems about right. That's my point.
Now, you can add that it will be paid over a longer time period, etc, but that is not the point the article wants to make. You may not like the methodology employed, but that is not of interest as long as the article is factually correct.
My transparency remark alluded to something else. See above. It was only a small digression anyways.
"The article is about arms purchases committed to during the last two years, regardless of when they are delivered, paid, etc. And for this, the number seems about right. That's my point.
Now, you can add that it will be paid over a longer time period, etc, but that is not the point the article wants to make. You may not like the methodology employed, but that is not of interest as long as the article is factually correct."
Ok, but it doesn't look like the NYT article you referenced (do you have a link?) is factually correct. It asserted that Venezuela spent more buying arms than Iran and Pakistan. That is almost certainly impossible. Venezuela is spending between 1.5 and 2 billion per year on ALL defense expenditures. Iran and Pakistan spend 4.3 billion per year on defense expenditures. So unless Venezuela spends every last dime on buying arms and none on things like salaries (and I know that is not possible becuase I saw all the salary expenditure in their financial statement) and Iran and Pakistan were spending less than half their budget buying arms that is impossible . So it is 99.9% certain that article is flawed.
Further, Brazil, Colombia, Mexico, Argenina, and Chile all spend more than Venezuela on their militaries - in most cases a LOT more. So while you can view military spending as wasteful, as even I do, you can't really make a case it is out of line.
Shorter oppos:
Defence overhaul spending bad!
Education spending bad!
Public medicine bad!
Infrastructure bad!
Public housing bad!
Privatization good!
Corruption good!
Neofascism good!
Festering barrios good (especially as a scapegoat for everything from hiccups to toejam)!
U-S-A! U-S-A!! U-S-A!!!
(Never mind that the USA is palpably rotting out from under itself. It is still the model that they would have us all believe in.)
If you want my respect, oppos, try citing REAL, independent news sources. VCrazies, Crackers Chronic-Ills, and El Mooniversal don't count. Try Panorama and Ultimas Noticias--if you can find any backing for your chop-logic in there. 
JohnH,
This issues were not discovered by the government. We have been talking about them for years now.
I have said several times in this blog about different things that are happening in different areas of education. Some of my relatives go to one of those misiones, they get payed for sitting there and listening to 120 hours of "Chavismo", after which they get 120 hours of mediocre technical courses (before Chavez, you would get better courses, also for free, no crap on chavismo or any other pseudo-politics). Most of the students there are so gullible as to believe what their "teachers" say about Chavez making Venezuela an industrialized nation via cooperation with Iran (please!), they doze otherwise in the room and then go to protest if they are not payed the limosna they get for attending those courses.
The education minister says the government uses X% in education, another officer another figure, another another figure.
Many people in the opposition (read the newspapers) have been saying for years that the missiones are not working comparing the amount of money pumped into them, that the pupils are going in legions away from them when they see they are a waste of time.
Venezuela is becoming more and more a country of beggars, and with less and less real education, for that matter.
Man, your mind is so closed as one of those Bush-fans coming from some tiny towns in the US Mid-West. They are called right, you are called left. No more difference.
You just want to hear what you feel does not destroy your two-colour world.
Kepler,
YOur problem is you are taking specific incidents and extrapolating to "everything sucks".
There have been from time to time big cheating scandals at the US military academies and Ivey League universities. They also have famous graduates who are idiots such as Bush. Should we therefore say higher educations sucks in the U.S.? By your reasoning we would. Yet it is considered the best in the world.
I get the sense you haven't been walking around on this planet long enough to realize everything has problems and there is nothing unusual about that.
"Venezuela is becoming more and more a country of beggars, and with less and less real education, for that matter."
Really, the 790,000 people who have new private sector jobs are beggars?
Open you mind dude.
Sire,
Last years final budget numbers INCLUDED a net pay down of $3.5 billion in debt. So the actual budget surplus was fairly good size.
I wish the country I lived in ran budget surpluses!
ow: again, you're messing things up.
As you state, the total Venezuelan military spending may have been about $2 billion for each of the two past years. However, that is NOT what the article is about, namely arms purchases committed to/which they signed contracts for during the last two years, regardless of when they are delivered, paid, etc. And for this, the number seems about right. That's my point (yes, they may not be fully reflected in the military budget as they are being paid in installments or on delivery, however, this is not the point of the article). You may not like the methodology employed, but that is not of interest as long as the article is factually correct.
Link: http://www.nytimes.com/2007/02/2...3&
ex=1330059600
You can also say that the ration of military spending GDP in other countries is higher, which is too factually correct, but that is not what the article is about. Let's stick to what the article says and keep the rest aside for now, albeit correct.
*ratio of military spending to GDP
OK, I guess the surplus is then a bit better than 0.5% of GDP. However, this is also to be expected given current commodity prices.
Sire - the government was elected to keep people with your mentality from ransacking the country....again.
The spending priorities are health and education. Just look at the % GDP compared to 10 years ago in those 2 areas.
Rubén
Sire,
That is the point. The numbers aren't really plausible. Venezuela isn't spending 100% or 90% of its defense budget on new arms. Can't be. And if they are counting the value of contracts signed by Venezuela in this year versus what other countries actually spent, not the value of contracts they signed, what is the point of that? That is comparing apples to oranges and is worse than misleading.
I guess you are going to make me read the entire Ministry of Defense financial statement aren't you just so I can get the actual numbers
And the bottom line is also clear that Venezuela spends less on its military than Iran, Pakistan, Chile, Colombia, Argentina, etc.
Anyways, Sire, I don't think I can comment on those numbers anymore until I read the militaries financials. Once I do I'll let you you.
Dan OW Burnett, you show your ignorance once more. First you tell me Viaduct #1 is a POS because it fell down. FYI, there is nothing man-made that can stop 2 million tons of mountain.
Regarding Russian military contracts... COD??? That is prepaid you ignorant PSF.
You really are grasping now.... I invite your readers to visit www.venezuelatoday.net for true objective news and analysis on Venezuela... stuff that is interesting and written by experts... not some dumb nurse or doctor wannabe who is gringo as gringo can be, lives in Manhattan, has never lived in Venezuela, and who only recently discovered Venezuela in 2002 after having the incredible good fortune (for you, not her) of marrying a Venezuelan.
On top of that you are a pathological liar, you are shilling, you have shown yourself to be amoral and the list goes on....
THAT'S VENEZUELA TODAY DOT NET
You can really tell a lot about a person when they use the word "dude."
I cannot tell you how many times (while I was on the Miami-Dade police reserve) we arrested young dumb punks who addressed us that way. Usually we were going to go easy on them and once that word came out of their mouth we changed our minds...
That is immature language Dan.
GWEH - not to mention your immature commentaries..moron.
Rubén
ow, again, you're mixing things up. Let's stick to what the article says and keep the rest aside for now, albeit correct. The point is that they are counting the value of contracts signed by Venezuela in the last two years, versus what other countries contracted in the same period. This happens to be more than every SA country, which is factually correct.
Globally, their military-GDP ratio may be smaller, but as stated earlier, that's not what is central regarding the 4 billion number.
Sire - i get the impression that in order to be "right" you are simply narrowing the definition of military spending and trying to redefine it.
It is a fact that Venezuela' s % GDP spent on weopons is less than most other countries in Latin America.
Rubén
It is a fact that Venezuela' s % GDP spent on weopons is less than most other countries in Latin America.
Yea, but it was the other way so freaking what!? This "global dictarship" attitude from US media is sickening. If Venezuela choosed to spend alot of money on their defense i would applaud & respect it.
Nah Rubén, I am just sticking to that what's in the article. Nothing more, nothing less.
Sire - sticking to the article does not negate the facts stated by OW. No puedes tapar el sol con un dedo.
Rubén
Read precisely, Rubén. I did not negate them. However, in a discussion solely concerning the article, they are just not pertinent.
elliv - you're right. I join your support as well.
Rubén
Kepler--
Apparently you missed the point entirely. The headline said, "AN investigará irregularidades en misiones educativas."
The last time I checked, the AN was controlled by Chavistas. And they're doing an investigation of their Predient's programs!
I don't know if you have been paying attention to the US Congress lately, but such investigations did not happen from 2003-2007. Republicans simply did not do any oversight on a Republican president. And the news media did not care.
If the AN does a reasonably serious investigation, it bodes well for democracy in Venezuela.
JohnH, I didn't. They do that because people have been saying it for years.
Gees...Eurokind or dollarchild with Che-Guevara poster?
Sire,
I think the article is clearly wrong. But to avoid more back and forth lets see what the Min Def financial statement tells us.
BTW, I never saw that article in the NYT. Do you have a link for it? You got it from somwhere, no?
Hi GWEH and All,
I visit venezuelatoday.net on a regular basis. I have several favorites...the two main ones are The Oppenheimer Report (don't you just wish he had interviewed Chavez instead of Barbara Waters) and Gustavo Coronel. His archives are great.
Cheers...John
"First you tell me Viaduct #1 is a POS because it fell down. FYI, there is nothing man-made that can stop 2 million tons of mountain."
Damn GWEH, where were you when it was all being blamed on Chavez? And now you say nothing could have been done?
Anyways, if the people who had built it had been on top of what they they were doing they could have done any number of things to keep that from happening - ground freezing for one. The people who built the Grand Coule damn used that with great success a good two decades before the Viaduct was even built. But given that you never get out of the swamp you live in I wouldn't expect you to know that.
"Gustavo Coronel"
I guess he is great - if you don't mind reading tonns of just made up BS? The man is factually challenged, to say the least
ow, you're still messing things up. As to prove whether the article is correct, the data you're looking for does not matter.
I posted a link to the article above.
Sire,
The article states that Venezuela has spent more than $4 billion dollars on arms during the last two years. If the financial statements show they didn't then the article is wrong - full stop. This stuff about they are counting signing contracts is something you are stating - I don't see it in the article (BTW, again, can you please give a link for that article).
Do you even read my posts?
As mentioned several times, I posted the link above, cf: Sire | 03.23.07 - 9:06 am |
And, no, the article does not say it "spent" all of them in their budget, but that it is acquiring armament for 4 billions.
Sire, I do read your posts - but maybe sometimes too fast Sorry I missed the link but thanks for giving it.
First, the original source is the US Defense Intelligence Agency. Aside from the question of whether I even trust them I reveiwed their web-site and couldn't find any stats on this subject.
Second, note the correction at the bottom of the times article - they admitted to confusing arms purchases with defense spending. It looks to me like they did that not just with one number but the whole article. Note the $4 billion number they reference for arms purchases over two years is pretty close to what Venezuela's total defense spending is for two years. I wouldn't be surprised if that is what has happened here.
To be investigated further. And if we get real desperate I suppose we could try e-mailing Mr. Romero.
Or let's wait for the SIPRI report, due mid-2007.
What is the SIPRI report?
The Stockholm International Peace Research Institute usually releases data on arms expenditure, etc. at the end of the 1st semester every year.
No need to wait for that - we already know exactly how much Venezuela spent on its military last year as that data has been published by the Venezuelan government.
Gov is just another source..
The government is the only source that counts. I doubt SIPRI knows how much soldiers pulling guard duty at Miraflores are getting paid apart from what the Venezuelan government tells them.
But I'm up for the comparison when it comes out.
Let's see..
In Merrill Lynch's view government workers and their families are "living off the public sector" while speculators of course "earn" their money.
Indeed, I'm sure that is how they see it. Plus even the Merrill Lynch's of the world do a good job of milking the government when given the chance as the city of New York certainly knows.
Commenting by HaloScan
